Tensions in Cyprus and the region were heightened in January following
public threats by Turkish government officials to launch new attacks
against Cyprus.

The U.S. and other governments strongly condemned the threats, and the
Clinton Administration dispatched the State Department's Director for
Southern European Affairs, Carey Cavanaugh, to the region to help defuse
tensions and to explore ways to advance U.N. efforts on Cyprus.

In recent months Turkey has increased its provocations against Cyprus.
Turkish occupation troops shot and killed unarmed Greek Cypriots along
the cease-fire line in June and October, while in August occupation
troops and extremists from Turkey's ultra-nationalist Gray Wolves
attacked unarmed Greek Cypriot civilians in the buffer zone, killing two,
and injuring U.N. personnel.

Although the international community called for the parties to take
immediate steps to reduce tensions following the attacks, in November
Turkey conducted military exercises during which jets repeatedly violated
Cyprus' airspace and troops carried out mock attacks on Cypriot villages.

Turkey's Army Faces Cyprus

Ankara's military forces threatening Cyprus include its massive illegal
occupation army an estimated 35,000 troops and 300 modern tanks
offensively deployed in the occupied areas, 90 fighter aircraft in
Turkish bases across the sea from Cyprus, and a sizable number of landing
craft, giving Turkey complete dominance of the air and sea.

While in recent months occupation troops have attacked unarmed civilians
along the cease-fire line, Turkish military aircraft have regularly
violated Cyprus' airspace. The Cyprus government regularly protests to
the U.N. over these hostile acts, which increase tensions in the region
and undermine international efforts to achieve a negotiated settlement.
Cyprus now not only confronts a state which refuses to take any measures
to end its 23-year occupation, but one which also threatens the security
of Cypriots in the free areas of the country.

To defend against further aggression a fundamental right and obligation
of all sovereign states the Cyprus government, has no choice but to
bolster its defenses to deter Turkey from further hostile acts. As part
of this defense effort the government signed an agreement in January to
acquire an anti-aircraft system.

No Time For Turkish Threats Against Cyprus

Despite Turkey's overwhelming military superiority, Turkish officials,
including Foreign Minister Tansu Ciller, threatened to attack Cyprus. "We
will do the same thing we did in 1974 and if necessary, we will strike,"
Turkish Defense Minister Turhan Tayan said on January 8, referring to
Turkey's brutal invasion of Cyprus 23 years ago.

These threats heightened U.S. concern that the division of Cyprus imposed
by Turkey's military occupation will result in a regional conflict, and
the Clinton Administration publicly rebuked the Turkish government.

"No country, and specifically in this case Turkey, should threaten the
use of military force against Cyprus. No country, specifically here
Turkey, should undertake military force against Cyprus," the State
Department spokesman said on January 9 in condemning these threats.

"We need peace and stability in the Eastern Mediterranean," he
continued, stressing that it is "no time for the Turkish Government to be
making wild and dramatic statements which will not, of course, be
supported by any sensible member of the international community."

Earlier, the State Department spokesman had expressed concern over the
Cyprus government's decision to acquire an anti-aircraft missile system.
"Cyprus is already one of the most militarized areas in the world," he
said, adding that "Turkey maintains a very large military force on the
island."

The U.S. supports steps to "radically reduce" the armaments and troops on
Cyprus, the spokesman said on January 7, adding that the complete
demilitarization of Cyprus, proposed by the Cyprus President in 1993, "is
a very worthy objective. Furthermore, President Clerides' proposals to
redirect funding for military tasks to support economic development and
peacekeeping are positive." Turkey continues to refuse to discuss the
proposal, despite growing international support for the demilitarization
of Cyprus.

Ample Time to Reach a Peaceful Settlement

No component of the anti-aircraft system will be delivered to Cyprus
before Spring, 1998, so "the intervening period provides ample time for
seriously engaging in efforts for a peaceful settlement," President
Clerides said on January 31, and the State Department spokesman also
stressed on January 13 that this fact "should do away with some of these
very aggressive statements that we've seen from the government in Turkey."
Turkey's latest threat comes at a time when the international community,
led by the U.N., the U.S., the U.K., and the E.U. are preparing a major
effort in 1997 aimed at reaching a comprehensive Cyprus settlement.
In Nicosia, Cavanaugh discussed U.N.-proposed measures to reduce tensions
along the cease-fire line. Emphasizing the importance of creating an
atmosphere that will facilitate negotiations, Cyprus Foreign Minister
Alecos Michaelides declared on January 21 that once this international
initiative is underway the Cyprus government will unilaterally adopt
additional measures to "help the climate and reduce tension so that the
efforts which will be launched will be effective."

U.N. Continuing to Prepare for Substantive Talks

Intense efforts to prepare the groundwork for direct talks are being
impeded by the inflexibility of the Turkish side, which continues to
maintain positions outside the U.N. framework for a settlement.
"We still have the goal of realizing serious and substantive talks," the
U.N. Secretary-General's Special Representative for Cyprus, Han Sung Joo,
said in Nicosia on February 5, prior to departing for Ankara. His
discussions were a step in the right direction, but "at the moment not a
sufficient step. We need more," he said.

Despite these difficulties, "we remain committed to pursuing a
comprehensive settlement on Cyprus," U.S. President Bill Clinton said in
his February 7 report to Congress on Cyprus, and the U.S. Secretary of
State, Madeleine Albright, has already discussed ways to achieve progress
on Cyprus with the E.U. and with the U.K.'s representative for Cyprus,
David Hannay.

The U.S. is "prepared in this new year to play a new heightened role in
promoting a resolution in Cyprus," Albright told the U.S. Senate Foreign
Relations Committee during her confirmation hearing on January 8, and the
State Department spokesman reiterated on January 31 that Albright
believes the U.S. must play "a concerted, aggressive role" this year in
achieving a Cyprus settlement.

CLERIDES: CYPRUS SETTLEMENT ONLY THROUGH PEACEFUL MEANS

"Only peaceful efforts can solve the Cyprus problem," Cyprus President
Glafcos Clerides told a press conference on February 4, efforts which
must finally end Turkey's continuing occupation and division of Cyprus
and "lead to the demilitarization of Cyprus."

The U.N., the United States and the European Union all agree that common
ground on the key issues must be reached before direct talks resume, he
continued.

Common ground will only be reached when the Turkish side brings its
positions closer to those established by the U.N. framework. He pointed
out that the Turkish views on sovereignty and political equality, for
example, continue to be outside the U.N. framework.

To break the current deadlock and achieve progress, the international
community must direct its efforts towards Turkey. "If there is to be a
change in the positions of the Turkish side, the majority of the work
must be carried out in Ankara," Clerides said.

E.U. Accession a Catalyst for a Negotiated Settlement

President Clerides has made accession to the European Union a centerpiece
of his policy, in the belief that E.U. accession can serve as a catalyst
for efforts to reach a comprehensive settlement. Negotiations for Cyprus'
accession are set to begin six months after conclusion of the E.U.
intergovernmental conference, expected in June. Both the E.U. and the
United States which supports Cyprus' accession to the Union believe that
this year offers a unique window of opportunity for achieving a
comprehensive settlement.

Despite the many benefits that E.U. membership will accrue to the Turkish
Cypriot community, Turkey continues to fiercely oppose E.U. membership
for Cyprus.

Main Issues to a Comprehensive Settlement Addressed

Emphasizing the need to press the Turkish side to display the political
will needed to reach a solution, President Clerides also outlined his
views on key issues of any settlement.

Security Guarantees: Given that the 1960 system of guarantees has failed,
President Clerides said that it should be replaced with an expanded, more
effective security arrangement so that no country could interpret any
arrangement as a pretext for aggression against Cyprus. Parallel to his
proposal for the demilitarization of Cyprus, the President also proposed
establishment of a multinational force operating under a U.N. Security
Council mandate which could guarantee the security of both communities on
Cyprus.

Territory: All Cypriot refugees must have the right to return to their
homes, as called for in the U.N. resolutions on Cyprus. Clerides
emphasized that any settlement must also ensure that the greatest number
of the 200,000 refugees refugees resulting from Turkey's ethnic
cleansing of the occupied areas must return to their homes in the area
which will be under Greek Cypriot local jurisdiction.

Federation: The President reaffirmed his support for a federal state on
Cyprus as outlined in the 1977 and 1979 High-Level Agreements, signed by
the leaders of the two communities, and in the U.N. Security Council
resolutions, particularly resolution 939 (1994), which clearly define the
structure for a federal state on Cyprus.

Illegal Settlers: Referring to the more than 85,000 thousand illegal
settlers Turkey has brought to the occupied areas since 1974, the Cyprus
President said that any settlement must be in accordance with the U.N.
resolutions on Cyprus, which call for the complete withdrawal of all
foreign settlers from Cyprus. "The division of Cyprus today benefits
neither Greek nor Turkish Cypriots," Clerides concluded, stressing that
he will continue in his efforts to reunite the country.

HOUSTON CHAPEL TO HOUSE STOLEN CYPRIOT FRESCOES

An opening preview of the Byzantine Fresco Chapel Museum in Houston,
built to house two 13th-century Cypriot frescoes stolen from the church
of St. Themonianos in the Turkish-occupied village of Lysi, was held on
February 8. Among those speaking were former U.S. President George Bush
and Dominique de Menil, president of the foundation which restored the
frescoes and built the chapel.

Since Turkey's 1974 invasion Turkish occupation authorities have
facilitated the theft of thousands of Hellenic and Byzantine antiquities,
including the Lysi frescoes, from churches and museums in occupied
Cyprus, as part of a systematic effort to destroy Cyprus' cultural
heritage. The Church of Cyprus, which remains the lawful owners, has
agreed for the restored frescoes to be displayed in the
specially-constructed chapel.

CYPRUS ON THE INTERNET

A variety of information on Cyprus can be found on the Cyprus government
home page (http://www.pio.gov.cy/) including an overview of Cyprus, its
government, people, and history. There are also links to other useful
sites, including the Cyprus News Agency (http://www.cyna. org.cy/) with
up-to-the-minute news coverage.

BRIEFS . . .

Cyprus President Glafcos Clerides congratulated U.S. President Bill
Clinton on his inauguration to a second term, expressing his "deep
appreciation for your personal commitment to a just and lasting solution
of the Cyprus problem and that its early settlement remains one of your
highest priorities."

To foreign businesses "Cyprus offers highly educated professionals, an
excellent communication network, well-functioning infrastructure and a
legal system based on internationally-accepted legal norms," President
Clerides told a meeting on the sidelines of the World Economic Forum, in
Davos, Switzerland, on January 31. "Cyprus ranks third among
international ship registries and fourth among the world's merchant
fleets," he said, a fact he attributed to Cyprus' cost competitiveness,
maritime infrastructure, and competence in serving the needs of
international shipping.

Cyprus Ambassador Andros Nicolaides has been awarded the "Knight
Commander's Cross (Badge and Star) of the Order of Merit of the Federal
Republic of Germany" for his efforts to improve German-Cypriot relations
while serving as Cyprus' Ambassador to Germany from 1992-1996. In
presenting the award on behalf of Germany's President, Roman Herzog,
German Ambassador to the U.S. Jurgen Chrobog said that Nicolaides had
"acquired a reputation for furthering Cypriot interests with great
political finesse and enormo us personal commitment." The continuing
division of Cyprus, Ambassador Chrobog said, is "painful to all Cypriots"
and underlines the need to reach a "peaceful settlement."

Cyprus and Israel increased bilateral trade by 13% last year to $111
million. and is expected to continue to increase substantially. Cyprus
exports to Israel include mineral, agricultural, and food products, while
Israel exports chemical products and machinery to Cyprus.

In its Cyprus section, the U.S. State Department's 1996 report on human
rights practices world-wide, criticized the use last summer of
"unnecessary deadly force" by Turkish occupation security forces against
unarmed Greek Cypriots civilians along the cease-fire line, resulting in
the deaths of two, as well as the "apparently politically motivated
killing," in July of a prominent Turkish Cypriot journalist, Kutlu Adali,
who had been "critical of Turkey's role" in the occupied areas. It also
condemns the occupation authorities for their treatment of the Greek
Cypriot and Maronite enclaved in the occupied areas.